Half-assed sanctions by the US and EU help drive up the cost of oil and natural gas. The oil producers, including Russia are the beneficiaries.
Big Windfall
Bloomberg reports Putin May Collect $321 Billion Windfall If Oil and Gas Keep Flowing
For all the hardships visited on consumers at home and the financial chokehold put on the government from abroad, Bloomberg Economics expects Russia will earn nearly $321 billion from energy exports this year, an increase of more than a third from 2021. It’s also on track for a record current-account surplus that the Institute of International Finance says may reach as high as $240 billion.
“The single biggest driver of Russia’s current account surplus continues to look solid,” IIF economists led by Robin Brooks said in a report. “With current sanctions in place, substantial inflows of hard currency into Russia look set to continue.”
The calculus may change completely, however, in case of an embargo on energy sales. And even without it, Russia’s oil exports and output are already falling, with the International Energy Agency predicting it may lose nearly a quarter of its crude production this month.
U.S, EU to Hit Russian Investments With New Round of Sanctions
Despite the fact that sanctions don’t work, the US and EU keep trying.
In a New Round of Sanctions U.S. will ban Russia investments and the EU proposes a ban on ships, trucks, and coal.
European Commission President Ursula von der Leyen said the EU is proposing to ban most Russian ships and trucks from entering the bloc, as well as Russian coal imports. The EU will also push ahead with a debate on targeting Russian oil, she said — a sensitive issue in Europe, where many countries are dependent on Russian fuel imports.
Calculus Will Not Change
The calculus will not change because the proposal is headed nowhere.
All 27 nations in the EU would have to agree to cut the energy flow from Russia.
And that’s not going to happen for obvious reasons.
Germany's minister of defense says the European Union must consider fully banning any import of Russian gas amid accusations of war crimes.
YES. **SANCTION RUSSIA FULLY.**
What is everyone waiting for on this?!
Russia deserves NO place in our world economy given its horror.
— Trish Regan (@trish_regan) April 4, 2022
EU Energy Costs Soar
A surge in European energy prices means the region is now spending almost a tenth of its GDP on energy, the highest share since 1981. We see Europe as the most exposed to the energy shock and at risk of stagflation. See our weekly commentary. https://t.co/alWI2glWqJ pic.twitter.com/zNktF1Iiba
— Elga Bartsch (@bartsche) April 5, 2022
Peanuts
Russia is waging a cruel, ruthless war, also against Ukraine’s civilian population.
We need to sustain utmost pressure at this critical point.
So today we are proposing a 5th package of sanctions. pic.twitter.com/GEuPQf0Wgr
— Ursula von der Leyen (@vonderleyen) April 5, 2022
Note that there is no proposal to sanction Gazprom or Gazprombank, the Russian energy supplier and its bank.
Stop Imports Now
Banning coal as the @EU_Commission proposes is peanuts if you compare it to gas and oil …and will definitely not stop Putin’s war crimes…
Read the letter of 211 MEP’s on what really needs to be done! pic.twitter.com/baBfdlPecg
— Guy Verhofstadt (@guyverhofstadt) April 5, 2022
Yep go ahead. Drive the EU into an instant economic depression.
Germany would not agree to halt energy imports. Now would Hungary. I am unsure is any EU nation would in practice.
Blowhard Politicians
Politicians like Guy Verhofstadt are nothing but hot air blowhards.
As for the Russian actions in the Ukraine, there are plenty by the US as well if you look at illegal and unjustified actions by the US in Iraq, Libya, Vietnam, etc.
Biden Supports More Oil From Canada, But No Realistic Option to Get It Here
In the US, Biden Supports More Oil From Canada, But No Realistic Option to Get It Here
Everyone wants an easy solution to Ukraine, energy prices, and inflation. There is none, and sanctions certainly have not helped.
Meanwhile, De-Globalization an New Supply Chains Are Inefficient and Will Drive Up Inflation.
Mike Shedlock via MishTalk.com